Etisalat Digital in association with Central Bank of the UAE (CBUAE) has initiated the launchpad for latest of one of its kind of Blockchain technology related podiums that is anticipated for curbing in the trade finance losses that accounts for duplicated invoices that can be valued between Dh500Millions to Dh1Billion as stated by UAE’s Trade Connect (UTC).
The latest technology-oriented and blockchain enabled podium can aid in curbing up of duplication of invoices, that is submitted either via an error or a fraudulent activity.
UTC is a conglomerate of Etisalat Digital, the Central Bank of the UAE as well as Avanza Innovations alongside seven other premier banking institutions. It will initially be frontally utilizing the latest launched technology in vast association with Artificial Intelligence, Machine Learning and its core aim is for blocking off primary dubious or any suspicious activities like in form of invoices, transaction links etc within trade finance.
Following up with the successive planning and its integration in long-run, other initiatives will be set out to make the platform better secured and are anticipated to be launched later.
The statement provided by Etisalat Digital in correspondence with query raised regarding the extent of the hurdle to be cleared off by the technology also stated off further that: “Statistics are not generally available because banks’ risk mitigation processes are activated to prevent losses.”
However, the firm was prompt in stating that even if it meant that there is a small fraction of one or two percent of the financed worth’s duplication or fraud in the provided invoices, it can thereby lead to huge catastrophe with up to AED500Mn’s to AED1Billion Dirhams of possibly invalid invoices being offered to UAE banks yearly.
For current status, the platform will be utilized in order to avert the same invoice from being paid twice, whether it has been offered via an error or to make a deliberate fraud, thus mitigating huge losses suffered by the Banks in the territory. This initiative also marks the successful commencement of state-of-art, innovative and one of its kind in the entire Gulf territory, although there is a presence of similar technology equipped in Singapore as well as Hong Kong.
The Banking Institutions that are also Co-involved in the launch are Commercial Bank International (CBI), Commercial Bank of Dubai (CBD), Emirates NBD, First Abu Dhabi Bank (FAB), Mashreq Bank, National Bank of Fujairah (NBF), and RAKBANK. However, these premier Gulf Banks primary ambitions is to take this scheme be implemented nationwide.
Zulqarnain Javaid, CEO of UTC. within a press conference for marking out the commercial launchpad of the platform emphasized upon the competence of the platform by stating out that: “The system will evolve so that it can handle financial crime risk, which includes trade-based money laundering and sanction busting, and later on, we hope that we will be able to take this platform towards e-invoicing. Electronic invoicing is about digitising invoicing and we will have to work with multiple stakeholders inside and outside the banks.”
He later as well as added upon that: “Later on, we hope to be able to advance bills of lathing on a digital basis. This will be a very big modification because it involves, port authorities, customs, governments, international players, freight forwarders and logistics firms.”
The Head of Sales and Advisory, international and transaction banking at participating bank, CBD, Atif Raza, also stated out that: “We were targeting to thread together all the banks operating from this part of the world with an effort to avoid double financing done through duplicate invoices.”
He also further elaborated that: “I think it has all the merits to become a nationwide platform for all the banks operating from this part of the world.”
